The term “Industry 4.0” has its origins in the high-tech strategy project of the same name that was presented to the broader public as part of the Hannover Messe 2011. At its core was the systematic interlinking and further development of industrial production with modern IT and communication technology. As illustrated in Figure 1, the “4.0” refers to its status as the fourth industrial revolution.

Figure 1: The four phases of industrial revolution

When they presented it in 2011 at the Hannover Messe, the project team of scientists, industry experts and government officials likely would not have been able to imagine the future significance of the Industry 4.0 theme. Since then, some years have gone by and the then-visionary nature of the concept has evolved, at least in part, to a genuine phenomenon. In some areas, industrial production has developed into networked, digital manufacturing – even if the road to a complete Industry 4.0 factory, one that corresponds completely to the accepted definition, still has some way to go. In fact, this definition is extremely comprehensive; however, we can summarise it as the digital transformation of production through the convergence and application of digital (industrial) technologies. As shown in Figure 2, Industry 4.0 is essentially characterised by the following four areas of technology:

Figure 2: Four central areas of technology for Industry 4.0

 

1.) CONNECTIVITY AND COMMUNICATION

  • Industry Internet (of Things) – that is, machines, products and, ultimately, all network-compatible products are connected with one another in a multidirectional, real-time fashion
  • Cloud & cybersecurity – that is, the management of large amounts of data in open, cloud-based yet secure IT systems

 

2.) DATA, INTELLIGENCE, ANALYTICS

  • Big data & analytics – that is, the combination and intelligent analysis of large amounts of data from a range of sources (e.g. ERP, SCM, CRM, machines, etc.) for targeted, data-based support of decisions
  • Artificial intelligence – that is, machine learning-based development of algorithms for a diverse of applications including data analyses, autonomous systems etc.

 

3.) ADVANCED PRODUCTION

  • Production technology – that is, the use of new technology – such as 3D printing – for everything from spare parts and prototypes to intelligent, on-demand production
  • Advanced robotics – that is, autonomous, cooperative robots that interact with one another and deal with entire production stages independently on the basis of (sensor) data

 

4.) HUMAN-MACHINE INTERACTION

  • Augmented reality – that is, the displaying of process-relevant (supplementary) information, e.g. in the areas of maintenance & logistics, via data glasses or dynamic touch surfaces
  • Simulation – that is, optimisation and simplification through real-time data-based simulation of products, processes & scenarios

 

These are very many terms and components for which real examples exist of the vision of Industry 4.0 already becoming a reality. In order to benefit from the above-mentioned convergence of the “IT” and “production” worlds into unified cyber-physical production systems, a sustainable strategy is required. Companies should carefully analyse the opportunities and risks of their respective market environment. More precisely, the attractiveness of digital transformation with regard to turnover and efficiency potentials must be reviewed systematically and verified realistically in terms of existing internal implementation expertise. Necessary investments in cyber-physical upgrades to the production process should always be potential-based and laid out with corresponding business cases.

We have access to a broad network of cross-industry experts who can assist you with everything from the ascertainment of sales and efficiency potentials to the assessment of opportunities and risks and the in-depth examination of business issues. Get in touch today!

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Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.

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Markus Fost

Managing Partner
Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.

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